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Rabat – Morocco’s compensation fund report, which accompanies the 2026 Finance Bill, shows that the government has earmarked MAD 13.77 billion ($1.34 billion) to subsidize the prices of butane gas, sugar, and soft wheat flour.
The government plans to maintain subsidies for essential goods and preserve domestic price stability amid ongoing global geopolitical uncertainty and persistent drought conditions in the country, including the allocation of MAD 8.5 billion ($829 million) in 2025 to support butane gas.
The state subsidy for a 12-kg butane cylinder averaged MAD 53.47 ($5.20) between January and August 2025, marking a 14% decrease compared to the same period last year. Consequently, the total compensation cost for butane declined by nearly 17% year-on-year.
For sugar, the government set a fixed subsidy of MAD 3.64 ($0.36) per kilogram for refined sugar, with total support costs reaching MAD 3.05 billion ($298 million) between January and August 2025, a 0.8% increase compared to the previous year.
Meanwhile, the weighted average import subsidy for raw sugar stood at MAD 0.58 ($0.06) per kilogram during the same period, representing a sharp 73% decrease year-on-year.
The government said the additional support aims to offset domestic production shortfalls due to drought and maintain stable prices in local markets.
Total sugar subsidies, both refined and raw, amounted to MAD 3.41 billion ($332 million), reflecting a 23% annual decrease.
Support for national soft wheat flour reached approximately MAD 880 million ($86 million) during the same period, including measures to enhance local wheat production and cover storage costs.
Due to reduced domestic output during the 2024-2025 agricultural season and high import costs, Morocco continued to suspend customs duties on wheat imports and provided import subsidies to ensure supply stability and keep bread prices at MAD 1.20 per loaf.
The average subsidy granted for soft wheat imports during the first eight months of 2025 stood at MAD 6.33 per quintal, down 51% from the previous year. The cost of soft wheat import support reached MAD 257 million by the end of August, a 65% decrease from 2024.
Overall, combined subsidies for imported wheat and national soft wheat flour amounted to MAD 1.13 billion ($110 million), marking a 29% decline year-on-year.
Additionally, the government continued subsidizing food products for residents of Morocco’s southern provinces, allocating MAD 88 million ($8.6 million) between January and August 2025.
